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You're insane if you don't own gold, investors told
Not owning gold during the current financial turmoil is "a form of insanity", according to an investment analyst at a leading City firm.
Although gold has been rising for 10 years, it's still in a 'linear trend', according to Cazenove Capital's Robin Griffiths. 'Eventually it will go exponential'
By Richard Evans 5:46PM GMT 11 Jan 2011
Robin Griffiths, a technical strategist at Cazenove Capital, told CNBC: "I think not owning gold is a form of insanity. It may even show unhealthy masochistic tendencies, which might need medical attention."
He added that the dollar was heading for "oblivion".
Mr Griffiths predicted that gold's 10-year bull run would continue and even intensify. "Although it's been a top performer for each of the last 10 years, it's still in a linear trend," he said. "Eventually it will go exponential and make more in the last little bit than the whole of the 10-year trend."
He said investors should regard any short-term falls in the gold price as a buying opportunity, adding that gold was still not an "over-owned trade".
His comments come against the background of the US Federal Reserve's huge monetary stimulus from quantitative easing, which many believe will result in inflation and a fall in the value of the dollar.
"The downward trend in the dollar is awesomely powerful," Mr Griffiths said. "It's vital to get yourself out of the dollar long-term on any significant rally. Continuing to own a currency that is going to be printed virtually into oblivion – that's the official policy – is crazy."
He added: "Real assets hedge paper money being printed into oblivion, so you've got to own gold and you've got to own other commodity-related investments still."
Gold hit an all-time high of $1,432 last month and is currently trading around $1,375.
Meanwhile, the gold price would have to exceed $2,000 for the metal to be considered in a bubble, according to an analyst at Deutsche Bank. "We believe gold will continue to compete aggressively for investment capital," said Michael Lewis in a report.
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